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If you get coverage through your job, your employer picks your
insurance and you may or may not have very many choices about it. If you
buy your own, you're in charge, but your choices are limited by the
plans available to individual purchasers, as well as by how much you can
afford to spend.
Unfortunately, there's no such thing as standard coverage. Details vary
enormously from one plan to another. The best value is not necessarily
the plan with the cheapest premium or the one with the most benefits.
It's the plan that covers the health services you want and need for the
lowest out-of-pocket expense (see "types of insurance"). In essence,
differences among plans come down to three intertwined elements:
benefits, costs, and restrictions.
Benefits: Every insurance plan will cover you for doctor and
hospital bills, with various limits, discussed below under "costs."
Virtually everything else, including prescription drugs, glasses,
psychotherapy and preventive care, such as immunizations and screenings,
may or may not be covered, depending on the specific plan.
To figure out how well a plan suits your needs, first make a list of the
health services you and your family normally use. For each plan, note
the amount of coverage for each of those services -- for instance, "100
percent," "80 percent," "not covered." Once you've got a handle on how
fully each plan covers your health needs, you can evaluate cost
differences.
Costs: If you don't use many medical services, your primary cost
for indemnity coverage will be the premium. If you do use a lot of
services, it will be hard to gauge your actual costs, since you must
factor in the deductible, co-payments, and any excess charges or
uncovered services.
In contrast, cost is easy to gauge with a true HMO -- a managed-care
plan with no out-of-network option. Once you've paid your premium,
nearly everything will be covered and you'll be liable only for small
co-payments.
Estimating the cost of a managed-care plan with an out-of-network option
is tricky, because your ultimate cost depends on whether or not you
actually go out-of-network. If cost considerations make you lean toward
a managed-care plan, read its literature thoroughly to decide whether
you can live with the restrictions it imposes.
Restrictions: Generally speaking, a managed-care plan will limit
your choice of providers and require you to get pre-approval for
services. If your pediatrician shuns HMOs or you have a difficult health
problem, you may decide that you can't abide limits like these.
Keep in mind, though, that indemnity insurance also comes with
limitations in the form of deductibles, co-payments and uncovered
services. These financial roadblocks can inhibit freedom of choice as
much as any managed-care bureaucracy.
Another worry is that many consumers equate freedom of choice with
medical quality. They're not entirely wrong. If you receive poor
treatment in a managed-care plan, it's hard to vote with your feet.
But they're not completely right, either. The quality of medical care
varies considerably both in and out of managed care. In fact, the best
managed-care plans offer quality advantages you won't get outside
managed care, such as outreach for preventive services, heath-risk
screening, and coordination of care.
Know your provider
Whether you choose indemnity insurance or managed care, it's wise to
check up on your providers in advance. One way is via state insurance
department Web sites.
Florida, Maryland, Massachusetts, New York, and Rhode Island, for
instance, post lists of local doctors who have been disciplined for poor
patient care or, in some cases, criminal conduct. New York and New
Jersey rate local hospitals and doctors on how well they care for
cardiac patients. Florida, New Jersey, New York, Maryland, Texas, and
Utah rate local managed-care plans.
Nationally, the Joint
Commission on Accreditation of Health Organizations is the major
rating group for hospitals, the
National Committee for
Quality Assurance rates managed-care plans, and
thehealthpages.com lists surveys and other data on selected health
plans and health services.
If the insurance plan you prefer seems unaffordable, check the
money-saving strategies in the next section to see if there's a way to
reduce your costs.
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